# Digital Realty (DLR) Sector: Data center REIT | Field | Value | |---|---| | Price | $180.10 | | Market cap | $63B | | Intrinsic value source | Analysts | | Data as of | 2026-11-10 | | Next earnings | 2027-02-04 (estimate) | Analysts: Bullish Picks: Research only Discount category: Close to intrinsic value ## In short Digital Realty trades close to its intrinsic value because investors weigh strong AI and cloud demand against large spending and new shares, and a backlog that starts on time can lift the value. ## Themes and gap - Themes: AI supplier (ai-supplier), Power and energy (power-energy), Interest rates (interest-rates) - Gap type: Slow (slow) - Why: The Q4 2026 report and the 2027 guidance start the test, but returns on the new capacity show only as the backlog starts paying rent through 2028. ## About Digital Realty is a real estate investment trust (REIT) that owns, develops and operates data centers. It rents space, power and connections to cloud companies, network operators and other companies, in large halls for single customers and in colocation space with interconnection. At September 30, 2026, it had 311 data centers, including 88 in joint ventures and other unconsolidated entities, in North America, Europe, South America, Asia, Australia and Africa. The portfolio had about 3.2 gigawatts of IT capacity, and about 9.8 gigawatts more can be built. In Q3 2026, total revenues were $1.9 billion. Digital Realty also manages private funds and joint ventures that own data centers. It pays a quarterly dividend of $1.22 per share. The head office is in Austin, Texas. Andrew P. Power is President and Chief Executive Officer. ## Thesis Digital Realty trades close to its intrinsic value because investors expect strong demand for data centers from AI and cloud customers, but they weigh the large capital spending, the new shares that it issues and its debt. In Q3 2026, bookings reached a record $627 million of annual rent at its share, the backlog of signed leases rose to $1.8 billion, and Core FFO per share, excluding net promote, rose 11% to $2.10. For the value to grow, three things must be true. The backlog must start to pay rent on time, which needs new buildings and power on schedule. Development spending of $4.25 billion to $4.75 billion in 2026 must earn stabilized yields of 10% or more. Growth in AFFO per share must stay high after the new shares from the at-the-market program and the share-funded purchases. The Q4 2026 report and the 2027 guidance, expected in early February 2027, are the next tests. If the backlog starts on time and yields hold, the value can grow with AFFO per share over several years. ## Checkpoints - Oct 29, 2026: Q3 2026 results: bookings and guidance. Status: Passed. Watch: Bookings above $300 million at its share and a higher 2026 guidance pass; a guidance cut fails. Outcome: Bookings were a record $627 million, and Digital Realty raised its 2026 Core FFO guidance to $8.30 to $8.35. - Feb 4, 2027 (estimate): Q4 2026 results and 2027 guidance. Status: Pending. Watch: 2027 guidance for Core FFO per share growth of 8% or more passes; guidance for lower growth fails. - Apr 23, 2027 (estimate): Q1 2027 results: backlog starts. Status: Pending. Watch: A backlog that starts on schedule and higher same-capital cash NOI pass; delays of large leases fail. ## Balance sheet - Cash: $803M - Debt: $19.5B - Net debt: $18.7B - Net debt / EBITDA: 5.2× (high) - Ratings: S&P BBB+ (stable outlook), Moody's Baa1 (stable outlook), Fitch BBB (stable outlook) Digital Realty funds itself with unsecured notes in U.S. dollars, euros, pounds, Swiss francs and yen, bank credit facilities, new shares, preferred stock, joint venture partners and cash flow. At September 30, 2026, total debt was about $19.5 billion: $17.9 billion unsecured and about $1.6 billion secured and other debt. Cash and cash equivalents were $803 million. $1,656 million was drawn on the global and yen revolving credit facilities, which run to 2030. Net debt was 5.2 times Adjusted EBITDA, and fixed charge coverage was 4.8 times. In the first nine months of 2026, the company sold about 15.9 million shares under its at-the-market program for net proceeds of about $2.9 billion. In October 2026, it issued €1 billion of 5.125% notes due 2036 and CHF510 million of Swiss bonds. S&P rates the company BBB+, Moody's Baa1 and Fitch BBB, all with a stable outlook. The quarterly dividend is $1.22 per share, and there were 378,325,814 shares of common stock on October 27, 2026. As of 2026-09-30. Sources: - https://www.sec.gov/Archives/edgar/data/1297996/000110465926120212/dlr-ex99d1.htm - https://www.sec.gov/Archives/edgar/data/1297996/000110465926120710/dlr-20260930x10q.htm - https://www.sec.gov/Archives/edgar/data/1297996/000119312526415815/d106844dex991.htm - https://www.sec.gov/Archives/edgar/data/1297996/000119312526415814/d191285dex991.htm ## Dividends - Dividend yield: 2.7% (last 12 months, at the current price) - Paid per share, last 12 months: $4.88 (4 payments) - Current annual rate: $4.88 ($1.22 x 4 a year) - Payout ratio: 136% of the earnings of the last fiscal year (the year ended 2025-12-31) - Latest ex-dividend date: 2026-09-15, $1.22 per share - Growth over the last 5 years: 1.2% a year - Growth over the last 10 years: 3.4% a year Dividends per share by year: 2016: $3.52, 2017: $3.72, 2018: $4.04, 2019: $4.32, 2020: $4.48, 2021: $4.64, 2022: $4.88, 2023: $4.88, 2024: $4.88, 2025: $4.88. Source: company filings and market data, read on 2026-11-10. ## Recent events - 2026-10-29: Digital Realty reported Q3 2026 results. Total revenues rose 21% to $1.9 billion, and Core FFO per share, excluding net promote, was $2.10, against $1.89 a year earlier. Bookings were a record $627 million of annual rent at its share, and rents on renewal leases rose 11.8% on a cash basis. Digital Realty raised its 2026 guidance for Core FFO per share, excluding net promote, to $8.30 to $8.35. After the quarter, it bought an additional 16% of Teraco, mainly with 3.4 million new shares, and raised its stake to about 77%. - 2026-10-06: Digital Realty priced €1 billion of 5.125% guaranteed notes due 2036 and closed CHF510 million of Swiss bonds due 2029, 2032 and 2036. It will use the money for projects under its green bond framework. - 2026-07-23: Digital Realty reported Q2 2026 results. Core FFO per share was $2.65, including $188 million of net promote income from its development joint venture, and $2.13 without it. In July, it signed two hyperscale leases with $205 million of annual rent at its share. - 2026-06-29: Digital Realty agreed to buy the 64% equity interest of Blackstone funds in three fully leased data centers in Northern Virginia, with 288 megawatts of IT capacity, at a gross value of $7.8 billion. It paid $1.2 billion in cash and $2.3 billion in new shares. The expected initial stabilized capitalization rate is more than 6.5%. - 2026-02-05: Digital Realty reported 2025 results. Constant-currency Core FFO per share was $7.29 for 2025, and AFFO per share was $6.55. It gave 2026 guidance for Core FFO per share of $7.90 to $8.00. ## Latest news and filings - Last earnings: 2026-10-29 (8-K: https://www.sec.gov/Archives/edgar/data/1297996/000110465926120212/) - Next earnings: 2027-02-04 (expected; the company has not confirmed it) | Filed | Form | Headline | Period end | XBRL document | Link | | --- | --- | --- | --- | --- | --- | | 2026-10-30 | 8-K | Other company news | | | https://www.sec.gov/Archives/edgar/data/1297996/000119312526441892/d170330d8k.htm | | 2026-10-30 | 10-Q | Quarterly report for the period ended Sep 30, 2026 | 2026-09-30 | dlr-20260930x10q | https://www.sec.gov/Archives/edgar/data/1297996/000110465926120710/dlr-20260930x10q.htm | | 2026-10-29 | 8-K | Earnings release and Investor disclosure | | dlr-20261029x8k | https://www.sec.gov/Archives/edgar/data/1297996/000110465926120212/dlr-20261029x8k.htm | | 2026-10-09 | 8-K | New material agreement and New debt or financial obligation | | | https://www.sec.gov/Archives/edgar/data/1297996/000119312526419168/d368817d8k.htm | | 2026-10-06 | 8-K | Investor disclosure and Other company news | | | https://www.sec.gov/Archives/edgar/data/1297996/000119312526415815/d106844d8k.htm | | 2026-10-06 | 8-K | New material agreement and New debt or financial obligation | | | https://www.sec.gov/Archives/edgar/data/1297996/000119312526415814/d191285d8k.htm | | 2026-10-06 | 8-K | Other company news | | | https://www.sec.gov/Archives/edgar/data/1297996/000119312526414921/d178810d8k.htm | | 2026-08-19 | 8-K | Other company news | | | https://www.sec.gov/Archives/edgar/data/1297996/000119312526357083/d145363d8k.htm | | 2026-07-31 | 10-Q | Quarterly report for the period ended Jun 30, 2026 | 2026-06-30 | dlr-20260630x10q | https://www.sec.gov/Archives/edgar/data/1297996/000110465926089296/dlr-20260630x10q.htm | | 2026-07-23 | 8-K | Earnings release and Investor disclosure | | dlr-20260723x8k | https://www.sec.gov/Archives/edgar/data/1297996/000110465926086270/dlr-20260723x8k.htm | Every filing on SEC EDGAR (CIK 1297996): https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001297996&type=&dateb=&owner=include&count=40 ## Risks - Medium: New data centers need large amounts of electric power. Delays in power connections or construction can delay the start of rent from the $1.8 billion backlog. - Medium: Large cloud and AI customers sign most of the big leases. If they slow their spending or build their own data centers, demand and rents can fall. - Medium: Digital Realty issues many new shares. It sold about 15.9 million shares under its at-the-market program in the first nine months of 2026 and used shares for the Blackstone and Teraco purchases, which can slow the growth per share. - Medium: Total debt was about $19.5 billion at September 30, 2026, and net debt was 5.2 times Adjusted EBITDA. Higher interest rates raise the cost of new debt. - Low: A large part of the business is outside the United States. A stronger U.S. dollar lowers results from Europe, Asia and Africa. ## Links - Page: https://picks.utilarium.app/company/DLR/ - History of changes: https://picks.utilarium.app/company/DLR/history/ - JSON with full history: https://picks.utilarium.app/data/company/DLR.json > Picks is a personal record of stock picks. It gives general opinions about stocks, including a "Top pick" label. They are not tailored to your needs, goals or risk tolerance. Kevin is not a registered adviser and relies on the general-advice exemption in Canadian securities law (NI 31-103 s.8.25). Do your own research, or ask a registered adviser. Kevin may hold any stock on this site. Prices, intrinsic values and ratings can be delayed or wrong; check the original source. Full disclaimer: /disclaimer/.